Albany, NY -- (ReleaseWire) -- 05/16/2014 -- Along with the sustained and stable development of China's economy as well as the accelerated industrialization, China’s demand for oil and natural gas has kept rising rapidly in recent years. In 2013, China's oil and natural gas consumption reached 498 million tons and 167.6 billion cubic meters respectively, up 4.5% and 14.6 % year-on-year.

Amid the jumping demand for oil and natural gas, China has enhanced the construction of oil and gas pipeline networks. In 2013, Chinese oil and gas pipeline network pattern initially formed with the total mileage of 106,200 kilometers. In accordance with "Twelfth Five-Year Plan", the total length will be about 150,000 km by 2015, which will boost the development of oil and gas transmission steel pipes and other related materials to a certain extent.

Welded pipes and seamless steel pipes, especailly SSAW (Spirally Submerged Arc Welding) and LSAW (Longitudinally Submerged Arc Welding), are required in the construction of oil and gas transmission pipeline networks. As of the end of 2013, China had been building and proposed to set up six trunk oil and gas transmission pipelines; CNPC and CNOOC had been establishing and planned 10 gas pipelines which will be completed successively in 2014-2016. The above 16 pipelines need about 11.19 million tons of SSAW (70%) and LSAW (30 %).

In China, major SSAW and LSAW manufacturers consist of Shengli Oil & Gas Pipe, PCK, Baoji Petroleum Steel Pipe and so on. PCK is China's largest longitudinal welded pipe manufacturer. At the end of 2013, PCK’s four production bases were equipped with six longitudinal welded pipe production lines with the annual capacity of 1.9 million tons, two spiral welded pipe machine production lines and a high-frequency ERW (electirc resistance welding) pipe production line with the combined annual capacity of 810,000 tons.

Oil well pipes are mainly used in oil and gas exploration and exploitation, devived into tubings, casings and drill pipes. In 2013, China produced about 5.8 million tons of oil well pipes, and the apparent consumption approximated 4.5 million tons.

At present, the competition pattern in Chinese oil well pipe market remains stable in a relative sense, and main players like Baosteel, Changbao Steeltube, WUXI SEAMLESS OIL PIPE, Anhui Tianda and Hengyang Valin Steel Tube occupy more than 80% market share. Moreover, to adapt themselves to the new situation that oil exploration heads toward deep and ultra deep wells as well as geological environments become increasingly complex, some manufacturers represented by Changbao Steeltube are adjusting their product mix.

By the end of 2013, Changbao Steeltube had accomplished 80 % of its high-end oil well pipe processing line project invovled with the total investment of RMB159 million. The project is to upgrade products on the basis of the original equipment, including one 85,000-ton non-API tubing heat treatment production line and one 40,000-ton finished pipe thread line.